Back to the weekly charts for today. The Nasdaq (first chart below) flirted with but could not hold onto a breakout of its September 2000 downtrend line this week, a level the index will have to clear for this rally to continue. 1388 and 1397-1400 are now resistance, and 1347, 1320 and 1302 are support. The Dow (second chart) and S&P (third chart) formed bearish gravestone dojis on their weekly charts, suggesting more downside for the market. 8500 is a big support on the Dow, followed by 8200-8300, and critical support is 8000-8100. The S&P now faces resistance at 900. Support can be found at 890, 880 and 865-870, and 855 is critical support. On the plus side today, the equity-only put-call ratio closed at a very high .88 – but the VIX, the options volatility indicator (fourth chart), closed down on a down day, a negative because it means that those put buyers didn’t pay up for downside protection. On the plus side, volume remains light on this correction, but the evidence suggests that the pullback is not yet finished.
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